Ambassador Emma Hopkins OBE spoke on the EU Reform during The Future of the UK in the EU event in Sofia on 9 February 2016.
A lot has been said about Great Britain in Europe, particularly in the last two years. Some of it has been thoughtful and accurate. A lot of it hasn’t. I want to give you an idea of the reformed Europe we are aiming to build – with the UK at its heart.
In my remarks today I want to start by looking at the past, at Britain’s history in Europe. I then want to move on to the present, and outline the UK’s reform agenda, and I’ll conclude with some thoughts on what the future looks like.
For all our connections to the rest of the world – of which we are rightly proud – Britain has always been a European power and we always will be.
From Caesar’s legions to the Napoleonic Wars. From the Reformation, the Enlightenment and the Industrial Revolution to the defeat of Nazism. We have helped to write European history, and Europe has helped write ours.
In more recent decades, we have played our part in tearing down the Iron Curtain and championing enlargement of the EU.
And contained in this history is the crucial point about the UK, our national character, our attitude to Europe.
I know that the UK is sometimes seen as an argumentative and rather strong-minded member of the family of European nations.
It is true that our geography has shaped our psychology. We have the character of an island nation – independent, forthright, passionate in defence of our sovereignty. But we are not isolationists. We are the only advanced economy that commits 0.7 percent of our GDP on development spending as well as 2 percent on defence.
And so we come to the European Union with a frame of mind that is more practical than emotional. For us, the European Union is a means to an end – prosperity, stability, the anchor of freedom and democracy both within Europe and beyond her shores – not an end in itself.
Within the EU we regularly and insistently ask: How? Why? To what end? What will be the outcome?
Which brings me to the present. I believe that European citizens are feeling less secure than at any time since the Cold War.
On our borders, Russian aggression threatens the Eastern Neighbourhood. To the south, the failed states of Libya and Syria present dramatic challenges to our collective security.
Within Europe, economic stagnation, unemployment, a rapidly ageing population and widespread voter disengagement cause deep unease.
Voter disengagement is making politics much less predictable. In recent years, we have already seen the rise of parties that are opposed to all, or parts of, the European project.
So some have asked: why are the UK raising fundamental questions about the future of Europe when Europe is already grappling with several deep crises?
Our view is that if we don’t address these challenges now, the danger is that the European project will fail. And we do not want that to happen. My Prime Minister wants the European Union to be a success. And he wants a relationship between Britain and the EU that keeps the British people in it – and engaged.
If we achieve an agreement that works for Britain and works for our European partners, David Cameron will campaign to keep Britain inside the EU with all his heart and soul.
So, what is that we want?
We want four things. We want Europe to be more competitive. We want fairness for those who choose not to join the еuro zone. We want greater democratic accountability.
And we want to reduce the attractiveness of the UK as a destination for those who want to take advantage of our generous benefits system.
First, the strength and competitiveness of the European economy.
Europe is losing ground to the rest of the world. Ninety percent of global growth originates outside Europe. And EU productivity lags significantly behind that of others, especially the US.
One-fifth of young people in the EU can’t get a job.
If the EU allows itself to be priced out of the world economy, the next generation will not get jobs and living standards will decline. Growth must now be the EU’s number one focus.
This is an area on which EU Member States largely agree. However, the UK believes we need to intensify our efforts.
We want to see more and faster progress in cutting unnecessarily complex and expensive regulation, particularly when its burden is borne by small and medium size businesses.
We want to see a deepening of the Single Market, particularly in digital and services. The Single Market works well when we’re trading goods – much less well when we are trading services, despite the fact that services account for 75 percent of our economies and are generating the vast majority of new jobs.
We want a young British or Bulgarian graduate with a great business idea to be able to get finance from investors anywhere in Europe – and to be able to sell their services anywhere, too.
Finally, we want to see more energetic work on securing trade deals. The EU-South Korea Free Trade Agreement came into force in July 2011. Four years later we see that EU exports to South Korea increased by 55 percent. I am sure that there are Bulgarian companies benefiting from this as well.
But there are trade deals with Japan and the US and an investment agreement with China waiting to be concluded.
We believe Europe must and can do more to drive growth and jobs for all.
The second reform we’re seeking, which we believe is important for Bulgaria, too, is to protect the legitimate interest of those not in the euro zone.
The UK wants the euro zone to be stronger, and supports the steps needed for that to happen. We see logic in furthering economic, banking and financial integration within the euro zone. Even though we are not part of the single currency – and never will be – it is firmly in our interests for it to be a success. 40 percent of our exports go to the euro area.
But we want to make sure that these changes respect the integrity of the Single Market and the legitimate interests of non-еuro members – like the UK, but also like Bulgaria. So we are seeking legally-binding principles that safeguard the operation of the Union for all 28 Member States – and a safeguard mechanism to ensure these principles are respected and enforced.
For example, we want to ensure that taxpayers in non-euro countries will not have to bail out the euro zone. Let me give you an example – recent moves to use the European Financial Stabilisation Mechanism to fund bridging loans to Greece have highlighted the risk that despite political reassurances, euro-outs might find themselves financially liable for euro area problems. This would have been the case if the UK had not spoken out strongly.
The guarantees that we are seeking will benefit those that will never be in the euro like the UK and those that hope to join at some future point like Bulgaria, but that might be several years in the future.
The third essential element of what we want to achieve through our EU reform agenda is about sovereignty, democratic accountability and power.
And this follows on from what I have said about the euro zone, because the decision to create the euro introduced a new and different dynamic. Currency union has an in-built logic that dictates that Member States will need to integrate more closely over time.
But that’s not the choice or destiny of every Member State. Indeed, the European Council acknowledged in June 2014 for the first time that an “ever closer union” in today’s diverse EU would mean different things for different countries.
And that is critical for the UK. For us, the phrase “ever closer union” is difficult to understand. And is simply not appealing to the majority of Britons.
And that is why we want to end Britain’s obligation to work towards an “ever closer union” – and to do this in a formal, legally-binding and irreversible way.
In addition, we believe national parliaments should be given a far greater say in connecting citizens to decisions made by the EU.
So we also want to enhance the role of national parliaments by proposing a new arrangement where groups of national parliaments, acting together, can stop unwanted legislative proposals from the European Parliament.
Finally, we want to see the EU’s commitment to subsidiarity fully implemented, with clear proposals to achieve that. As the Dutch have said, the ambition should be “Europe where necessary, national where possible”.
Finally, migration – perhaps the one area where there is the greatest misunderstanding of what the UK wants to achieve.
Let me set out a bit of the context. Unlike most other Member States, including Bulgaria of course, the UK’s population is expanding. The UK population grew from 59 to 65 million between 2000 and 2015 – more than 10 percent. Our population is set to reach over 70 million by 2027 and we are forecast to become the most populous country in Europe by 2050. Currently net annual migration to the UK is running at over 300,000 a year.
The pressure this puts on our public services is immense. As a result there is real public concern. These very substantial flows of people are much higher than forecast – and far higher than the EU’s founding fathers ever envisaged. These flows have also, of course, had a significant impact on a number of Member States, many of whose most highly qualified citizens have departed en masse. You will recognise this here in Bulgaria.
The UK has always been an open, trading nation and we do not want to change that. The principle of the free movement of labour is a basic treaty right and it is a key part of the single market. We don’t wish to change that, either.
But we do want to find arrangements to allow a Member State like the UK to restore a sense of fairness to our welfare system.
So we are seeking to have greater control on migration from the EU by cracking down on abuse and criminality and reducing the draw of our welfare system.
The UK is unusual across the EU in that it provides generous non-contributory in-work benefits designed to attract the young or long-term unemployed into work and then supports them with top up benefits.
However, these benefits have become a draw to those from other Member States. We don’t want your graduates to be financially better off stacking shelves in a supermarket in Britain than undertaking skilled work in Bulgaria. Many citizens are claiming these benefits – in some cases before they have contributed to our welfare system on day one of starting work.
The average amount received through tax credits per family with at least one EU national is around 6,000 pounds per annum (15,000 leva) in addition to their wage. Many claim considerably more.
But this is a shared challenge across the EU.
So the proposal we are currently negotiating is a safeguard mechanism which would allow those Member States facing an exceptional inflow of workers from other EU Member States to restrict access to in-work benefits for four years for newly arrived workers – it will not have a retrospective effect.
The other change we are seeking relates to child benefit. The UK taxpayer finds it incomprehensible that a person coming from another Member State can claim child benefit in the UK for children not resident there at UK rates and send it back to their home country. Under the proposals, we are seeking to index link child benefit to the rates applicable in the home countries.
The UK is one of the most vibrant and multicultural societies in the world. We have benefited economically, socially and culturally from successive waves of migration, especially from the countries of the Commonwealth and the EU. As David Cameron has said, “We are Great Britain because of immigration, not in spite of it.”
But the scale and speed of movement that we have seen in recent decades just isn’t sustainable. This is why the debate on migration is so passionately fought in the UK. And this is why this is at the heart of our EU Reform agenda. The current polling suggests that this one issue is the most important to voters in a referendum.
So I hope you will agree that the steps which would be needed to make Britain more comfortable in its relationship with the EU are hardly outlandish or unreasonable.
Nor is it correct to characterise the UK’s reform ambitions as somehow selfish or Anglo-centric. Far from it. There are clear areas in which we expect every single other EU Member State to recognise something that they understand, something they want, something where they can work with us.
The process of establishing common ground is well underway. Since the June European Council, technical negotiations have been taking place in Brussels and in European capitals.
And in the last few months, the UK Prime Minister has been travelling to European capitals to make the case for reform. David Cameron was here in December talking to Prime Minister Borissov.
Last week, Donald Tusk wrote to all Member States with a draft texts for a new “UK settlement “with the EU for negotiation.
We are now in the middle of a live negotiation and it is entering a crucial stage. Much progress has been made and we believe a deal is in sight. But there is still more hard work required to get agreement from all other 27 Member State before leaders meet in Brussels on 18 and 19 February to discuss.
If a deal is made, my Government will campaign to keep the UK in a reformed EU.
If there is agreement in February the referendum could be held as early as the end of June – but it must be held by the end of 2017.
So that’s the past and the present. What of the future?
Many other MS have told my Prime Minister as he has travelled around Europe that the EU is stronger with the UK, and the UK is stronger in the EU.
If the EU is able to respond to the concerns of the citizens of the UK and negotiate an acceptable solution for all 28 Member States – then I believe this will be good evidence that the EU can respond to the needs of its people. That it can find solutions. And act decisively in a flexible way.
I have touched on why that is important for us but it is also important for the future of the EU.
The UK can bring much to the European project. The UK is the fifth largest economy in the world. The biggest defence player in Europe with one of the most extensive diplomatic networks on the planet. We bring our influence as a permanent member of the UNSC and our developed capabilities to respond to security and terrorist threats.
The question is not could Britain succeed outside the European Union, but rather how will we all be most successful?
If we remain - We will continue to make sure that Europe works for the countries of Europe, for the businesses of Europe, for the peoples of Europe, and, crucially, for the British people who want to work and have security, and get on and make the most of their lives.
This means having the tough conversations and asking the difficult questions – how will the UK and all EU Member States be most prosperous?
How will we create the most jobs? How will we have the most influence on the rules that shape the global economy and affect us? How will we be most secure?
David Cameron has always said that the best answers to those questions can be found within a reformed European Union, and I think that is something that we can all agree on.
This is our idea for Europe. Soon, it will be up to the British people to decide.